Latest news with #Mexico-US
Mint
5 days ago
- Business
- Mint
Mexico might be the shortcut exporters need to bypass US tariffs
T. K. Arun A 90-day window to cut a special deal has made Mexico a hot prospect for global exporters seeking to dodge steep Trump tariffs, without moving operations to the US. Trucks queue near the Mexico-US border before crossing the border. US President Donald Trump said he would hold off a planned tariff hike on Mexican products and instead keep duties at existing levels for 90 days. (File Photo: AFP) Gift this article The world is watching Mexico, not because of the 5.7 magnitude earthquake that has struck its Oaxaca region, or the prison riots in Veracruz that have claimed several lives. Such disturbances are not uncommon in the region. Instead, global attention is fixed on Mexico because it alone has secured a 90-day window to finalize tariff terms with the US, even after the 1 August deadline has expired. The world is watching Mexico, not because of the 5.7 magnitude earthquake that has struck its Oaxaca region, or the prison riots in Veracruz that have claimed several lives. Such disturbances are not uncommon in the region. Instead, global attention is fixed on Mexico because it alone has secured a 90-day window to finalize tariff terms with the US, even after the 1 August deadline has expired. This rare grace period is significant: it will delay investment decisions in many countries that export to the US and stall tariff-jumping investments into the US itself. Investors are in wait-and-watch mode. Also Read | Trump vows higher tariffs, India responds At present, Mexican exports of steel and copper to the US are subject to a 50% duty, just like similar imports from elsewhere. Automobiles and goods that are not compliant with the US-Mexico-Canada Agreement (USMCA) face a 25% tariff. In contrast, goods that meet USMCA requirements attract low or zero tariffs. For compliance, at least 75% of the value of the good must originate in the region covered by the agreement. To prevent someone from importing a good into Mexico at, say, $25 and then exporting it to the US at a marked-up value of $100—technically satisfying the 75% value-add requirement—the USMCA also demands substantial transformation of the good. This means the finished product must fall under a different customs classification from the imported input. If the US, at the end of this 90-day window, agrees to impose an import duty of just 5% (or even 10%) on non-USMCA-compliant imports from Mexico, it would create a compelling incentive for exporters from high-tariff countries to set up plants in Mexico rather than within the US, to bypass steep duties. Consider pineapples. Under the Harmonized System of Nomenclature (HSN), fresh pineapples are coded 08043000, while canned pineapple is classified as 20082000. Costa Rica, the world's largest exporter of pineapples, currently faces a 15% US import duty. But if Mexico secures a deal for a 5-10% tariff, a Costa Rican firm, or any other, could set up a canning plant in Mexico. Fresh pineapples could be imported, peeled, sliced, and canned there, then exported to the US. Because the canned product has a different HSN code, this fulfils the second condition to qualify as USMCA-compliant. Depending on the value added in Mexico, the canned pineapple may qualify to be exported on USMCA terms. If so, the product would be virtually tariff-free. Even if it doesn't qualify, it would still benefit from the lower Mexican rate. Also Read | Trump tariffs: Is the world watching globalization fall apart? In trade economics, when a domestic market is large enough, a country can raise tariff barriers to force foreign producers to invest locally in order to access that market—this is called tariff-jumping. But if nearly the same benefit can be gained by investing in a nearby lower-cost country with a concessional duty regime, companies might prefer that route. They get access to the target market while saving on labour and operating costs. Switzerland, for instance, faces a 39% tariff, the highest in Europe. It's a major exporter of optical, technical, and medical equipment to the US. If its attempts to negotiate a better deal by offering to invest heavily in the US fall through, it may have to shift production to North America. If Mexico secures a favourable tariff deal, Swiss firms would likely prefer producing in Mexico over the higher-cost US. Similarly, if Donald Trump withdraws the current exemption on pharmaceuticals and starts applying country-specific duties rather than sector-specific ones, Indian pharmaceutical companies may also find it worthwhile to relocate some US-focused production to Mexico. That gives Mexico a major incentive to offer Washington concessions in return for a favourable tariff agreement. If it succeeds, it stands to attract a wave of foreign investment aimed at the US market. For now, the uncertainty holds everything up. Some exporters might decide to absorb the tariffs and lose share in the US. Others may be ready to relocate production to North America, but can't act until Mexico's deal is finalized. If Mexico doesn't secure a concessional tariff, some of those investments may flow directly into the US instead. So Mexico today is far more relevant than just for its Aztec and Mayan heritage, the cocoa that France turned into chocolate, the Mexican wave at football matches, or even the Coco Bongo nightclub in Cancún. Time to raise a glass of tequila, and perhaps send a delegation led by Shashi Tharoor to Tenochtitlan, or Mexico City, as it's now known? Views expressed are personal. Topics You May Be Interested In
Straits Times
13-07-2025
- Business
- Straits Times
Mexico sure it will strike deal with US to skirt tariffs
Sign up now: Get ST's newsletters delivered to your inbox Behind the scenes, work has been advancing between the Sheinbaum and Trump administrations. Mexico is projecting confidence that it will fend off a new set of 30 per cent tariffs that US President Donald Trump threatened on July 12 to impose in August, with talks already underway to avert the worst. After Mr Trump went public with his plan by posting on social media, Mexican President Claudia Sheinbaum noted in speeches near the northern border that every country has been getting a letter from Mr Trump as he implements global protectionist policies. Her team had already begun discussions with the US on July 11 and she was confident Mexico would get a deal. 'We've had some experience with these things for several months now,' Ms Sheinbaum said at a clinic opening in Ensenada, Baja California. 'And I think we're going to reach an agreement with the United States government.' Mexico-US relations have taken a bumpy turn since June, with increasing roundups of migrants by US agents, the border shuttered to livestock due to a screwworm infestation in Mexico , US Attorney-General Pam Bondi's reference to the neighbouring country as an adversary, and the financial strike by the US Treasury on three Mexican financial firms accused of aiding fentanyl traffickers. Mr Trump's letter threatened new tariffs on Mexico due to a lack of progress in challenging the country's drug cartels. Top stories Swipe. Select. Stay informed. Singapore Government looking at enhancing laws around vaping to tackle issue of drug-laced vapes in Singapore Singapore Why the vape scourge in Singapore concerns everyone Singapore I lost my daughter to Kpod addiction: Father of 19-year-old shares heartbreak and lessons Singapore Organised crime groups pushing drug-laced vapes in Asia including Singapore: UN Singapore Prison school to NUS: At 36, former drug abuser finds it's never too late to get a degree Singapore Driver arrested after 66-year-old woman dies in car crash at Geylang pasar malam Singapore Bland and boring? Some hospitals seek help from big names to enhance food menus for patients Asia Patriotism, peace and pain: The politics behind China's World War II narrative But behind the scenes, work has been advancing between the Sheinbaum and Trump administrations. Mexico is still in a favourable position relative to the rest of the world and its poised to benefit from protectionist US policies over the medium term, according to Bloomberg Economic's Felipe Hernandez. That outlook assumes the US does not apply the 30 per cent rate to goods that are compliant with the US-Mexico-Canada (USMCA) free trade agreement. That exception is part of the plan, but the situation remains fluid, a US official cautioned. Continuing the exclusion for both Mexico and Canada narrows the scope of Mr Trump's continental tariffs and would be a lifeline to sectors like the auto industry that rely heavily on the USMCA pact, which was renegotiated under Mr Trump's first term. Mexico and the US established a new binational working group on July 11 to address security, migration and economic issues, according to a statement posted on July 12 by Mexican Economy Minister Marcelo Ebrard on X. The first major task of the group will be to find an alternative to the tariffs and 'protect jobs on both sides of the border', the statement read. 'We told the group that this treatment is unfair and that we're not in agreement,' read the statement, jointly signed by the Economy and the Foreign Affairs ministries. The US president said the 30 per cent tariffs are separate from sectoral ones and could be raised if Mexico retaliates. 'Mexico still has not stopped the Cartels who are trying to turn all of North America into a Narco-Trafficking Playground,' Mr Trump wrote. 'If Mexico is successful in challenging the Cartels and stopping the flow of Fentanyl, we will consider an adjustment to this letter.' On July 11, the son of Sinaloa drug cartel kingpin Joaquin 'El Chapo' Guzman Loera pleaded guilty to federal drug trafficking charges and agreed to cooperate with US prosecutors. The US has blamed the Sinaloa Cartel for leading the fentanyl trade, importing chemicals from China to make pills in Mexico and smuggle them into the US. On July 9, US Treasury extended a deadline that will cut off three Mexican financial firms from the US financial system for potentially aiding in money laundering from the fentanyl trade. The US praised Mexico's cooperation in the move. BLOOMBERG
19-06-2025
- Politics
US plans to open fly factory in Texas as part of fight against flesh-eating parasite
The U.S. government plans to open what amounts to a fly factory by the end of the year, announcing its intent Wednesday to breed millions of the insects in Texas near the border with Mexico as part of an effort to keep a flesh-eating parasite from infesting American cattle. Agriculture Secretary Brooke Rollins said sterile male New World screwworm flies bred at the $8.5 million facility would be released into the wild to mate with females and prevent them from laying the eggs in wounds that become flesh-eating larva. It would be only the second facility for breeding such flies in the Western Hemisphere, joining one in Panama that had largely kept the flies from migrating further north until last year. The fly's appearance in southern Mexico late last year has worried agriculture and cattle industry officials and veterinarians' groups, and the U.S. last month suspended imports of live cattle, horses and bison from Mexico. The U.S. Department of Agriculture also plans to spend $21 million to convert a facility for breeding fruit flies near Mexico's southernmost border with Guatemala into one for breeding sterile New World screwworm flies, but it won't be ready for 18 months. The U.S. bred and released sterile New World screwworm flies into the wild decades ago, and it was largely banished from the country in the 1960s. Previously, it had been an annual scourge for cattle ranchers and dairy farmers, particularly in the Southeast. 'The United States has defeated NWS before, and we will do it again," Rollins said. She held a news conference at Moore Air Base with Texas and cattle industry officials. Mexican Agriculture Secretary Julio Berdegué said in a post Wednesday on X that Rollins' plan 'seems to us a positive step in different aspects, it will strengthen the joint Mexico-US work.' 'We trust the enthusiasm for cooperation that Secretary Rollins mentioned, and based on objective results and the reports from the USDA mission visiting us this week, we will be able to restart exports of our cattle as soon as possible," he said. The new Texas facility would be built at Moore Air Base, less than 20 miles (32 kilometers) from the Mexico border, and the USDA said it would also consider building a companion fly-breeding center there so that up to 300 million flies could be produced a week. The Panama facility breeds about 100 million a week, and the one in Mexico could breed as many as 100 million as well. The USDA has said the flies have been detected as close as 700 miles (1,127 kilometers) from the U.S. border, and some U.S. agriculture and cattle industry officials have worried that if the migration isn't checked, the flies could reach the border by the end of summer. Pressure from the U.S. prompted Mexico to step up efforts to control the fly's spread. Buck Wehrbein, a Nebraska cattle rancher and the president of the National Beef Cattlemen's Association, said Moore Air Base had a fly-breeding facility in the 1960s that helped eradicate it in the U.S. While there are treatments for New World screwworm infestations, cattle industry officials still worry that farmers and ranchers could see huge economic losses. They, agriculture officials and scientists also said the larva can infest any mammal, including household pets, and it has occasionally been seen in humans. 'The only way to protect the American cattle herd from the devastating threat of New World screwworm is by having a sufficient supply of sterile flies to push this pest away from our border,' Wehrbein said. Texas officials said they are grateful that the U.S. is taking the screwworm threat serious and pleased with the plans for combating it, including the new facility in Texas. Officials in other states are watching the fly's migration as well and see having sterile male flies outnumber the non-sterile one is crucial to checking its migration. 'We have a real concern about wildlife because of their ability to cross the border unchecked somewhat, whether it's feral pigs, deer, wild cattle, whatever the case may be,' Kansas Animal Health Commissioner Justin Smith said in a recent interview. 'There's an opportunity for them to be our exposure risk.'
New York Post
19-06-2025
- Science
- New York Post
US government to build $8.5M fly breeding factory to mass produce millions of flesh-eating parasites — here's why
Fighting flies with flies. The US government will be opening a fly factory in Texas to mass produce millions of infertile flies as part of a sterilization campaign aimed at eliminating a flesh-eating parasite with a penchant for beef. The $8.5 million breeding facility, just 20 miles from the US-Mexico border, will focus on the New World screwworm flies wreaking havoc in Mexico after an outbreak last year, Agriculture Secretary Brooke Rollins announced Wednesday. Advertisement 5 The United States government will open a fly breeding facility in Texas. via REUTERS The factory will propagate millions of sterile male screwworm flies to be released into the wild. The male flies will seek out fertile females and help prevent them from laying eggs, which they frequently deposit in cows' open wounds. 5 Female New World screwworm flies lay eggs that often produce flesh-eating larvae. AP When left to fester, flesh-eating larvae burst from the eggs and can decimate entire herds of cows. Advertisement While the flesh-eating parasites are treatable, they can spread to virtually any mammal, including household pets and, in some cases, humans. The Texas facility will mark the second of its kind on the Western Hemisphere. Up until now, Panama held the sole factory that helped prevent the screwworm flies from migrating north until last year. Two more fly breeding facilities are on the horizon, too. Advertisement 5 Screwworm flies were first pushed out of the US in the 1960s. AP The Department of Agriculture also plans to spend $21 million to convert a separate facility that breeds fruit flies near Mexico's southern border with Guatemala into a screwworm fly factory that won't be complete until the end of 2026. The USDA added that it is considering constructing a companion breeding center near the Texas one that would produce up to 300 million flies a week. The US tackled a prior screwworm fly issue during the 20th century through the same method and eventually eradicated the gnarly pests from the country in the 1960s. Advertisement Before that, screwworms were a persistent issue for cattle farmers in the Southeast. 5 Secretary of Agriculture Brooke Rollins is confident the US will 'defeat NWS' again. X /@BeefUSA 'The United States has defeated [the New World screwworm] before, and we will do it again,' Rollins assured at a news conference Wednesday. Mexican Agriculture Secretary Julio Berdegué celebrated the multi-nation collaboration in a post on X and called Rollins' plan 'a positive step in different aspects' that 'will strengthen the joint Mexico-US work.' 'We trust the enthusiasm for cooperation that Secretary Rollins mentioned, and based on objective results and the reports from the USDA mission visiting us this week, we will be able to restart exports of our cattle as soon as possible,' he wrote. 5 The flesh-eating parasites can spread to virtually any mammal, including humans. REUTERS The USDA warned that the flies have been detected just 700 miles away from the US border. Some agriculture and cattle industry officials in the US worry that the swarms could be at the border by the end of the summer — right when calving season starts. With Post wires
Winnipeg Free Press
18-06-2025
- Politics
- Winnipeg Free Press
The US plans to open a fly factory in Texas as part of its fight against a flesh-eating parasite
The U.S. government plans to open what amounts to a fly factory by the end of the year, announcing its intent Wednesday to breed millions of the insects in Texas near the border with Mexico as part of an effort to keep a flesh-eating parasite from infesting American cattle. Agriculture Secretary Brooke Rollins said sterile male New World screwworm flies bred at the $8.5 million facility would be released into the wild to mate with females and prevent them from laying the eggs in wounds that become flesh-eating larva. It would be only the second facility for breeding such flies in the Western Hemisphere, joining one in Panama that had largely kept the flies from migrating further north until last year. The fly's appearance in southern Mexico late last year has worried agriculture and cattle industry officials and veterinarians' groups, and the U.S. last month suspended imports of live cattle, horses and bison from Mexico. The U.S. Department of Agriculture also plans to spend $21 million to convert a facility for breeding fruit flies near Mexico's southernmost border with Guatemala into one for breeding sterile New World screwworm flies, but it won't be ready for 18 months. The U.S. bred and released sterile New World screwworm flies into the wild decades ago, and it was largely banished from the country in the 1960s. Previously, it had been an annual scourge for cattle ranchers and dairy farmers, particularly in the Southeast. 'The United States has defeated NWS before, and we will do it again,' Rollins said. She held a news conference at Moore Air Base with Texas and cattle industry officials. Mexican Agriculture Secretary Julio Berdegué said in a post Wednesday on X that Rollins' plan 'seems to us a positive step in different aspects, it will strengthen the joint Mexico-US work.' 'We trust the enthusiasm for cooperation that Secretary Rollins mentioned, and based on objective results and the reports from the USDA mission visiting us this week, we will be able to restart exports of our cattle as soon as possible,' he said. The new Texas facility would be built at Moore Air Base, less than 20 miles (32 kilometers) from the Mexico border, and the USDA said it would also consider building a companion fly-breeding center there so that up to 300 million flies could be produced a week. The Panama facility breeds about 100 million a week, and the one in Mexico could breed as many as 100 million as well. The USDA has said the flies have been detected as close as 700 miles (1,127 kilometers) from the U.S. border, and some U.S. agriculture and cattle industry officials have worried that if the migration isn't checked, the flies could reach the border by the end of summer. Pressure from the U.S. prompted Mexico to step up efforts to control the fly's spread. Buck Wehrbein, a Nebraska cattle rancher and the president of the National Beef Cattlemen's Association, said Moore Air Base had a fly-breeding facility in the 1960s that helped eradicate it in the U.S. While there are treatments for New World screwworm infestations, cattle industry officials still worry that farmers and ranchers could see huge economic losses. They, agriculture officials and scientists also said the larva can infest any mammal, including household pets, and it has occasionally been seen in humans. 'The only way to protect the American cattle herd from the devastating threat of New World screwworm is by having a sufficient supply of sterile flies to push this pest away from our border,' Wehrbein said. Texas officials said they are grateful that the U.S. is taking the screwworm threat serious and pleased with the plans for combating it, including the new facility in Texas. Officials in other states are watching the fly's migration as well and see having sterile male flies outnumber the non-sterile one is crucial to checking its migration. 'We have a real concern about wildlife because of their ability to cross the border unchecked somewhat, whether it's feral pigs, deer, wild cattle, whatever the case may be,' Kansas Animal Health Commissioner Justin Smith said in a recent interview. 'There's an opportunity for them to be our exposure risk.'
